What’s the fate of the Port of Churchill

A direct consequence of the former Harper government’s ending of the Canadian Wheat Board’s grain and barley market monopoly was the recent closing of the Port of Churchill by OmniTrax, a Denver-based company. Despite warnings, it was a consequence that was ignored by the Harper government.

On April 15, 2015, it was announced that a 50.1 per cent majority stake in CWB would be acquired by Global Grain Group, a joint venture of Bunge Limited and the Saudi Agricultural and Livestock Investment Company, for $250 million. The CWB name was changed to G3 Canada Limited.

Kyle Korneychuk, the spokesperson for the CWB Alliance, told 620 CKRM in Regina that he wasn’t surprised to see the movement of grain cease for the Port of Churchill. He said the major grainhandling companies have no interest in the small volume terminal and rail line because they have no ownership in the facility. The alliance had made this point to the Harper government.

A consequence of the closing of Canada’s only deep-sea port in the Arctic is that farmers will be forced to pay higher freight costs to move their grain to market. Until its demise, the CWB had accounted for 90 per cent of the grain shipped out of the port of Churchill. The port moved a scant 184,600 tonnes of grain last year, which was well below its yearly average of 500,000 tonnes.

Two days after OmniTrax closed the port, it cut rail freight service to Churchill from twice to only once a week. It was a double whammy to the community, which relied upon the rail line to deliver fresh produce and other goods for its residents.

Manitoba Premier Brian Pallister said he would not respond to threats from OmniTrax to provide more financial support to the company.

“We are no further ahead this year than we were last (year), despite significant payouts from (Manitoba) taxpayers to subsidize OmniTrax’s operation.”

It was the grain farmers, businessmen and politicians of the Prairies who were the strongest advocates of the establishment of a railway to and a port at Hudson Bay.

From its very beginning, the HBR was envisaged by Western politicians as a tool to break the protectionist policies of the Canadian government that benefitted eastern manufacturers at the expense of prairie farmers.

Prime Minister Sir John A. Macdonald’s National Policy had imposed a 20 per cent tariff on farm implements manufactured in the United States and Britain in 1879 that was raised to 35 per cent in 1884. While the Macdonald-imposed tariff protected Ontario and Quebec manufacturing interests, it forced prairie farmers to pay heavy duties for equipment produced outside Canada’s borders or exorbitant prices for substitutes from Eastern Canada.

The 20-year monopoly given to the Canadian Pacific Railway for building the transcontinental railway came at a high price for Westerners. Because there were no rival companies competing against the CPR, the railway could virtually charge whatever rates it pleased.

Manitoba Premier John Norquay tried to break the CPR’s stranglehold on railway traffic by first proposing a line to the American border and then an alternate route to Hudson Bay.

Sir Donald Mann and Sir William Mackenzie of the Canadian Northern Railway, who had been instrumental in early efforts to bring the railway to Hudson Bay, both expressed the opinion that “incalculable wealth” awaited discovery in the north once the line was completed.

Even the federal government’s rail minister, Frank Cockrane, had every faith in “the scheme and I will push the Hudson Bay Road for all it’s worth.”

But changes in federal government and numerous delays resulted in the slow pace of construction of the rail line and port. One of the delays was the selection of Port Nelson as the terminus of the rail line, which was found to be unsuitable. It took time and money before Churchill was decided upon.

Once the decision was reached to abandon Port Nelson, railway construction proceeded uninterrupted until the line reached Churchill. Grading was done in 1928 and track was laid on frozen muskeg by workers digging down to a depth of about 18 inches where permafrost was found.

On March 29, 1929, the Hudson Bay Railway was finally completed. The journey toward laying the last track had been long and difficult. The mile posts along the railway’s route were marked by decades of political wrangling and the triumph over obstacles thrown in its path by Mother Nature. The official ceremony opening the new line occurred a few days later on April 3. To recognize the “herculean task” of building the Hudson Bay Railway, the Historic Sites and Monuments Board of Canada a couple of years ago erected a commemorative plaque at The Pas.

While the rail link was completed in 1929, it wasn’t until 1931 that the port facilities were finished. Newspapers of the day reported crowds gathering along the shores of the northern Manitoba port to watch two steamships pull into the Port of Churchill.

“Sirens on tugs in Churchill harbor screamed, flags flew gaily from the steamers Farnworth and Warkworth, and Churchill itself was decorated with bunting on the arrival today of Dr. R.J. Manion, minister of railways, and the Ottawa party inspecting the port development before the first test shipments out of Hudson Bay,” reported the September 16, 1931, Winnipeg Tribune.

Twenty-four rail cars conveyed the Western Canadian wheat to the port.

An editorial in the Manitoba Free Press on October 6 stated that the loading of the two ships and their departure for England had ended the outcries of opponents who said the port was not viable.

“The Farnworth experiment shows that wheat from Western Canada can reach the European markets in much less time and with much less handling by the northern route ... The test shows that wheat can be rapidly handled by the railway and by the elevator equipment to Churchill; and there is no reason why, during the season, there should not be an unbroken succession of streamers coming into Hudson Bay laden with commodities for Western Canada and going out with wheat and other western products.”

The irony is that farmers at first enjoyed lower grain shipping rates with the completion of the railway and port, but insurance companies decided the route was too dangerous and raised their premiums to an amount equal to the freight costs to Montreal or Vancouver.

“A half-century of tireless effort had finally produced a railway to the Bay, but it was all in vain,” wrote Manitoba historian Ed Whitcomb in A Short History of Manitoba. “It should have been a major victory for the West, instead it accomplished almost nothing. Another farmers’ dream had died.”

Perhaps the dream that started in the 1870s has not yet died, since a First Nations group is still negotiating for the purchase of the railway and port. Or is a publicly-funded railway and port around the corner?